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Wednesday, March 20, 2013

Too big to fail? Yeah, that's the ticket!


We have problems, perhaps insurmountable ones. There may be solutions that can fix the problems but it may well be the case that these problems are a terminal case. The USA seems quite likely to go bankrupt. I know, I know, we can just keep printing money and watch as over time the world slowly becomes ever more reticent to accept our dollars in repayment of our debt. What will the US government do when China demands repayment in Yuan, or Swiss Francs, or gold? If that happens then our vaunted ability to print more money won't matter in the slightest, because we won't be able to repay our debts with that money, and when we default—as we must—there goes our credit rating. With a junk-bond credit rating goes the possibility of borrowing money at a reasonable rate. When printing money fails and when borrowing money fails, there goes America and there goes the world economy.

The idea that we can simply print money to solve our financial problems hurts the poor more than anyone else. I've been paying attention these last four years and the price of food and gasoline has risen steeply, much more steeply that the advertised inflation rate can account for. Those on a fixed income, those who live paycheck to paycheck, these are the ones who're hurt most by the Fed's reckless printing of money, because they're the last to get a raise and the first to realize a dollar doesn't buy very much food or gasoline anymore.

This is all familiar territory for historians. Empires rise and they fall. Why ask why? Just accept the fact that just as all men die, all the works of man are one day nothing more than dust in the wind. The usual formula follows a predictable path. We will continue borrowing until we reach a point where the interest on the debt is so high that we are unable to borrow enough to pay for even the interest on what we already owe. At the same time we will be printing money to stretch our time just a little further. Finally the third leg of this asinine tripod propping up our overloaded camel is called the mainstream media. Hollywood, Tinseltown, the talking heads reading the teleprompters, all the ones we listen to everyday will be deputized and tasked with spreading the message that we're too big to fail. Yes, if the USA goes down so does the world. Therefore—wait for it—the other countries of the world won't have any choice. They'll have to keep accepting our evermore worthless dollars in payment for goods and services or risk a worldwide economic collapse. Yeah, they'll have to take our worthless money because they won't have any choice. Yeah, that's the ticket!

Folks this isn't a RoadRunner cartoon. Just because you never studied law doesn't mean you're immune to the law of gravity, and just because an event or a circumstance is too terrible to contemplate, doesn't mean that it can't happen. The bill of goods the world is being sold by our mainstream media is this: if the United States can't pay its bills and we default then the world economy will collapse. Therefore the United States must pay its bills. Therefore the United States borrowing money and printing money to pay its bills is actually a good thing. We're only doing this because we must, sure! It's actually in the best interest of the entire world to keep accepting our worthless dollars. Yeah, that's the ticket! So stop complaining already, and get out there and spend! spend! spend!

Ignoring the law of gravity is easy when you're already lying on the ground, but it's a little harder to do while you're falling. The facts are incontestable. When we can no longer afford to pay our debts by hook or by crook, by borrowing or printing, then we will default, and then the world economy will collapse, and then hundreds of millions will starve. If your argument is that it can't happen because that would be terrible...then I would simply ask ... and?

After the collapse of the United States economy, the regime in power—Obama?—will employ all the kings horses and all the kings men, but they won't be able to put the United States of America back together again. People will demand basic services like heat when it's cold and first-aid for the wounded, medicine for the sick, food for the hungry. The people will demand it in their thousands, and hundreds of thousands, and in their millions. They will demand a solution and an Emperor to make it happen. This Emperor will have the backing of ruthless men with powerful weapons. Those with food will nicely be invited to share by these men with their powerful weapons. Those who are nurses and doctors will be invited to donate their time and energy to caring for the sick and wounded. This is how fascist regimes begin, by stealing from those who have and making slaves of those who can, and by getting rid of anyone who complains about it.

When the voluntary donation of food, resources, and services slows to a trickle, there will inevitably come a time when door to door searches and interrogations begin. At last the egalitarian utopia of collectivism will be at hand! Because dollars in the bank will be worthless and because a starving man would trade all his gold for a meal, the farmers and herders will be placed in a new and very precarious position in this nascent utopia. A historical case in point should be quite instructive at this point.
To Stalin, the burgeoning national revival movement and continuing loss of Soviet influence in the Ukraine was completely unacceptable. To crush the people's free spirit, he began to employ the same methods he had successfully used within the Soviet Union. Thus, beginning in 1929, over 5,000 Ukrainian scholars, scientists, cultural and religious leaders were arrested after being falsely accused of plotting an armed revolt. Those arrested were either shot without a trial or deported to prison camps in remote areas of Russia.

Stalin also imposed the Soviet system of land management known as collectivization. This resulted in the seizure of all privately owned farmlands and livestock, in a country where 80 percent of the people were traditional village farmers. Among those farmers, was a class of people called Kulaks by the Communists. They were formerly wealthy farmers that had owned 24 or more acres, or had employed farm workers. Stalin believed any future insurrection would be led by the Kulaks, thus he proclaimed a policy aimed at "liquidating the Kulaks as a class."

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